The Philippine Star
07/09/2006
The National Power Corp. (Napocor) will deploy a 10-megawatt (MW) generating set in Masbate in less than two weeks to normalize the power situation in the area, a top company official said.
Napocor president Cyril del Callar said the deployment of a new genset is in response to the orders of President Arroyo.
Del Callar said this move will fasttrack efforts to normalize the power situation in the island of Masbate, following a fire that damaged the state-owned power generation’s Power Barge 105 which supplies most of the island’s power requirements.
"This is the earliest possible date that the generating set can be delivered to the island. This will be supplied by General Electric (GE), one of the world’s top suppliers of electric generation sets and other equipment," he said.
He said the new genset will come on a lease basis. "This (lease contract) was done through a bidding process."
The Napocor chief said prior the bidding, the power firm scouted various sources, including private corporations, for generating sets that can be immediately deployed to the island.
"We invited major suppliers of generating sets to bid, both local and international. GE won the bid," Del Callar said.
"Barring unforeseen and uncontrollable events, we expect the generating set to be delivered by July 17, 2006 to Masbate. This will undergo the needed technical testing and synchronization," he said.
He said they expect the commissioning of the genset a week after its installation.
"We are targeting to have the generation set commissioned between July 20 - 25, 2006. But understanding the needs of the island and its people for electricity, we will do our best to have the island energized earlier than that," Del Callar added.
At present, Masbate’s power supply is provided by a land-based generation set, currently generating three MW of power. Masbate has an average demand of nine MW.
With the coming of the new 10-MW generation set, the island will be provided with its total demand, as well as back-up power needed for system reliability.
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The Philippine Star
07/09/2006
Still smarting from the setback in the sale of the 600-megawatt Masinloc coal-fired power plant to the YNN Pacific consortium, Finance officials said the government is prepared to auction the power facility again this year.
Finance officials would not rule out the possibility that YNN could still come up with the $227.54-million down payment over the weekend but the asset is likely to join other power plants scheduled to be bid out this year.
"If they do not come up with the money, the termination of the contract will take effect after 30 days," said Finance Secretary Margarito Teves, who is also board chairman of the Power Sector Assets and Liabilities Management Corp. (PSALM), the agency in charge of privatizing government’s power assets.
According to PSALM president and chief executive officer Nieves Osorio, the power plant could be bid out this year along with other power assets held by PSALM.
PSALM is planning to bid out this year the 25-year concession of the National Transmission Corp., the 100-mw Pantabangan power plant and the 12-mw Masiway hydroelectric power complex, the 360-mw Magat hydroelectric power plant and the 275-mw Tiwi and 410-mw Makban geothermal complex.
Should YNN be able to pull off the payment before the termination
order is issued, however, Teves said the transaction could still push through and YNN would be the "new player" in the power industry.
Teves said YNN’s bid of $561 million for the Masinloc power plant was still "the most advantageous to the government’s interests and more than double the losing bid of $275 million."
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The Philippine Star
07/08/2006
The consortium of Shell Philippines Exploration B.V (SPEX), Kuwait Foreign Petroleum Co. Philippines Onshore B.V., and South China Resources Inc. will spend up to $5 million for the initial seismic exploration in service contract (SC) 60 in northwest Palawan by the last quarter of 2006.
"It’s safe to say that the SC 60 consortium will spend $3 million to $5 million for the 2D and 3D seismic exploration by November or December this year," SPEX managing director Facundo Roco said.
By the third or fourth quarter of 2007, Roco said they will be able to determine if they could proceed with the formal gas and oil exploration in SC 60. "In the latter part of next year, we will be able to confirm whether there are oil and gas reserves in the contract area."
Earlier this year, the consortium said it will invest some P1.27 billion ($24 million) to explore gas and oil prospects in offshore northeast Palawan.
The group signed SC 60 with the Department of Energy (DOE) in January to signal the start of the seismic and exploration work in the untapped oil prospects in the northeastern part of Palawan.
SC 60, converted from the Geophysical Survey and Exploration Contract 99 (GSEC 99), covers a relatively unexplored area of 1.008 million hectares.
Northeast Palawan is one of the promising sites for petroleum exploration identified by the Philippine Petroleum Resource Assessment Project Study conducted by the Norwegian Agency for Development Cooperation and the DOE.
During the seven-year exploration period of SC 60, the consortium committed to invest a minimum of $24 million or about P1.27 billion for the project. About $2 million to $3 million will be spent for the seismic study alone.
The consortium shall conduct, seismic and exploration work to find petroleum and optional exploration drilling within the first seven years.
SC 60 also includes a 25-year production term in the event of a commercial discovery of petroleum. The SC 60 venture consists of 55 percent SPEX stake, 30 percent KUFPEC Phils. and 15 percent SCR.
The consortium is a group with strong background in the upstream petroleum industry. SPEX is the lead operator of the $4.5 billion Malampaya deep water gas-to-power project in Northwest Palawan, the biggest investment so far in the country’s oil exploration sector.
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The Philippine Star
07/07/2006
The merchant contract of the YNN Pacific Consortium will be terminated by Monday, the Department of Finance (DOF) announced yesterday after forfeiting the group’s $14-million performance bond.
The bond was ordered forfeit by the Power Sector Assets and Liabilities Management Corp. (PSALM) earlier after YNN failed to deliver the upfront payment of $227.54 million for the acquisition of the Masinloc power plant.
Finance Secretary and PSALM chairman Margarito B. Teves said yesterday that consistent with PSALM’s process, it would issue the notice of termination of contract on or before Monday, July 10.
"Termination takes effect 30 days after the notice is issued," Teves said.
He said the PSALM board had already given YNN ample time to settle payment, agreeing to extend the March 31, 2006 deadline to June 30, 2006. The condition was to raise the bond from $11 million to $14 million.
After YNN failed again, Teves said the PSALM board decided to forfeit the bond and terminate the contract.
"It was reasonable to grant them the first extension since the government had a good price at $561.7 million and was protected by the increased performance bond," he said. "But PSALM stood firm on the June 30 deadline."
According to Teves, the board has started to consider its options on when the Masinloc plant should be put on the auction block again.
"Our main concern is to ensure that the public will have ready access to power and energy at the lowest possible price," he said.
The only other bidder for the Masinloc plant was First Generation Holdings which made a bid of $274.85 million, much lower than the YNN bid and below the government’s reserve price of $388 million.
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The Philippine Star
07/07/2006
The government is urging the Malampaya consortium to provide additional natural gas volume that could support a 300-500 megawatt (MW) new capacity needed for the Luzon grid in the next four years, the country’s top energy official said.
Energy Secretary Raphael P.M. Lotilla said the Department of Energy (DOE) is currently in discussions with the Malampaya natural gas project operators composed of Shell Petroleum Exploration B.V., Chevron Texaco and PNOC-Exploration Corp.
"We have discussed the additional power requirements for natural gas that would be needed for power in the next few years. We’re looking at enough natural gas supply to support an additional 300 to 500 MW," Lotilla said.
DOE data showed that the Philippines will need an additional 4,438 MW in new capacity additions in the next five years to meet the projected demand for power.
Projected system peak demand in the country is expected to increase from 9,827 MW in 2005 to 14,265 MW in 2010 and 19,064 MW in 2014. The projected average annual growth rate for peak demand was placed at 7.6 percent over the next 10 years.
Based on the DOE data, the projected peak demand forecasts will require a total of 9,228 MW of new capacity additions in the next 10 years. For Luzon, 7,200 MW indicative capacities are needed to fill up the demand starting 2008.
The data also indicated that of the new capacity additions required, 578 MW will come from committed projects while the remaining 8,650 MW are indicative capacity additions identified as baseload, midrange and peaking plants.
Lotilla said the government sees the importance of preparing for these power demands in the future.
"On the government side, we are stressing the need for making the additional natural gas supply available and the investments are necessary to make that additional volume available in time for the critical period in Luzon," he said.
The energy chief, however, assured that these issues are currently being addressed by the government.
"Our expectations are that those responsibilities form part of the service contract. The investments to be made would have to be determined at the technical levels, but discussions and exchanges are taking place on the natural gas requirements," he said.
The Malampaya deep water gas-to-power project supplies natural gas to three gas-fired power facilities in Luzon namely: the 1,500-MW Ilijan operated by the National Power Corp. and Korea Electric Co.; 1,000-MW Sta. Rita and 500-MW San Lorenzo by First Gas Corp. (FGC). First Gen Corp., the owner of FGC, plans to put up an additional 300-MW gas-fired facility (San Gabriel) near its existing two power plants in Batangas.
Lotilla pointed out that though the need to put up additional capacity in Luzon will be pushed back a little bit, they need to ensure that the natural gas would be there if needed.
"Our natural gas requirements for the critical period around 2010 but can be deferred to 2011 due to the peaking requirements. It was initially targeted for 2008, but due to the power development plan, we had to make some adjustments, but it does not mean there would be no requirements even before that, because in the past, we have had thinning reserves like when typhoon Caloy hit Ilijan, it resulted in damage to the main transformer and is under-going repair for almost a month. These are the things we are attending to right now, he said."
For his part, Shell country chairman Edgar O. Chua said they are recognizing the government’s effort to address the need to increase capacity due to the continuing rise in power demand.
"It is something we are looking at, and is something we have yet to finalize. In fact, we have that assignment to the DOE and so we have to get back to them for this," Chua said.
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The Philippine Star
07/06/2006
The Department of Energy (DOE) may now be able to impose penalties on erring and illegal practitioners in the oil industry as the Supreme Court (SC) ruled recently that the DOE has the right to penalize these irresponsible players.
In an order released last June 26, the SC upheld the validity of a DOE circular which penalizes abusive acts particularly in the liquefied petroleum gas (LPG) industry.
"With the Court’s imprimatur, the law enforcement agencies of the government can now confidently run after those who resort to illegal practices which cheat ordinary consumers and expose them to dangers to life and property," Eneregy Secretary Raphael Lotilla said.
The DOE circular, issued on June 2000, provides for various penalties for the offenses committed by any person or entity engaged in any and all activities involving the commerce of LPG. It was issued purposely to deter, restrain and/or penalize any and all acts of illegal, irregular and anomalous business practices in the LPG industry.
The penalties under the circular range from P500 to P10,000 per violation for each cylinder for the first and second offense. For the third offense, business closure is recommended by the local government units (LGUs).
Illegal practices in the LPG sector include underfilling, tampering, altering or modifying of cylinder through any means such as changing the valve, re-painting and re-labelling by any person or entity other than the legitimate owner of the same, unauthorized refilling of cylinder, no trade name, unbranded cylinders, no serial number, no tare weight or incorrect tare weight markings, among others.
The LPG Refillers Association of the Philippines Inc. (LPGRA) challenged the DOE circular, alleging its unconstitutionality and confiscatory nature. The group said the enabling laws, Batas Pambansa 33 and RA 8479 do not expressly penalize the acts and omissions enumerated in the DOE circular. The Supreme Court however, ruled that Batas Pambansa 33, as amended, indeed criminalizes illegal trading, adulteration, underfilling, hoarding and overpricing of petroleum products.
"The Supreme Court decision is particularly crucial at a time when the DOE has strengthened its enforcement activities by partnering with the Department of Trade and Industry (DTI), the Department of Interior and Local Government (DILG) and the LGUs," he added.
Early this year, the DOE, DILG and the DTI signed a memorandum of agreement creating a multi-agency task force for the strict enforcement of penalties against illegal and unsafe practices in the LPG industry.
Under the MOA, a Task Force LPG shall be established in each of the provinces and cities to eliminate the rampant use of underfilled, dilapidated, uncertified and unsafe LPG cylinders which pose serious threat to public safety and security. The task force is to be led by the respective governor and mayor, DILG officers through the Bureau of Fire Protection (BFP) and the Philippine National Police (PNP), the DOE and the DTI.
The inter-agency MOA is also an expansion of an earlier partnership of the DOE with the LPG industry associations in August 2000 for the conduct of inspections and info campaign drives, among others, on the subject of LPG.
Records from the DOE show that 61 percent of the LPG establishments inspected by the DOE with the DTI from January to May 2006 had been found to be selling unbranded cylinders, underfilled and defective tanks with fake seals or no tare weights markings, serial numbers and appropriate seals.
Last year, about 76 percent of the LPG establishments inspected recorded one or more violations.
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The Philippine Star
07/06/2006
The government has the $14- million proceeds from the YNN Pacific Consortium Inc./Ranhill Berhad performance bond which was forfeited after the group failed to meet the deadline for the delivery of the 40-percent downpayment for the purchase of the Masinloc coal-firedpower plant, the country’s top energy official said.
In a press briefing, Energy Secretary Raphael P.M. Lotilla said the performance bond was released to the Power Sector Assets and Liabilities Management Corp. (PSALM) by Malayan Banking Berhad Sentul Raya and confirmed by its local unit Maybank.
"The cash is already with the trust account of PSALM, and the amount of $14 million is accounted for and was issued by a reputable international bank. Maybank was the confirming local bank," he said.
Lotilla, the vice chairman of PSALM, said the will be considered as part of the government’s privatization proceeds.
"This forms part of the privatization proceeds, and therefore in accordance to the EPIRA (Electric Power Industry Reform Act), it would be spent to pay-off the debts of Napocor (National Power Corp.)," Lotilla said.
He added the government will not go into a negotiated bid with Lopez-owned First Gen Corp., the only other bidder for the 600-megawatt (MW) Masinloc coal-fired facility.
Lotilla pointed out that First Gen’s bid was way below the government’s reserve price of $388 million.
In December 2004, First Gen submitted a bid of $274.85 million while YNN Pacific’s winning bid was $561.74 million.
According to the energy official, the PSALM board will still study the options for the sale of Masinloc although PSALM earlier said it may rebid the power facility "at the appropriate time if conditions warrant."
On the issue of forfeiting the bond, Lotilla said their action is deemed advantageous to the Philippine government.
"I also wanted to stress that the decisions that were made, it was the PSALM board acting solely on the basis of its assessment on what is advantageous for the government and the national interest," he said.
He pointed out that their decision not to extend the June 30 deadline for the payment of $227.54-million upfront cash was warranted since the 27-percent increase in the performance bond from $11 million to $14 million is already ample protection to the government.
"If you recall, the PSALM board had to make an assessment, when we decided to extend and at that time on the condition that there would be an increase in the bond from $11 million to $14 million or an increase of 27-percent on the bid bond," Lotilla said.
"Even if there was a 27-percent increase in the bid bond, the PSALM board decided to extend. And by June 30, the PSALM board again made an assessment on whether or not to close or to call on the bond, considering we also want to ensure the credibility of the privatization process is upheld," Lotilla said.
On Monday, the PSALM board served notice to the YNN-Ranhill consortium of the bond forfeiture for the group’s failure to come up with the upfront payment last Friday.
The PSALM board is chaired by Finance Secretary Margarito B. Teves. The secretaries of trade and industry, budget and management, and justice and the director general of the National Economic and Development Authority, and their representatives also sit as ex-officio members with PSALM president Nieves Osorio.
Lotilla also noted that selling the coal plant without a transition supply contract (TSC) was a major factor that bogged down the sale of the power plant.
He said that they are still waiting for the Manila Electric Co. (Meralco), the country’s largest power distributor, to firm up a TSC with Napocor.
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The Philippine Star
07/06/2006
PNOC-Energy Development Corp. (PNOC-EDC) expects to raise $300 million from its initial public offering (IPO) scheduled on the last quarter of this year, a top company official said yesterday.
In an interview with reporters, PNOC-EDC president Paul Aquino said part of the proceeds from the IPO will finance the upgrading of the company’s two-decade-old drilling facilities.
Aquino said they are also trying to raise through the IPO some $60 million for the payment of the company’s build-operate-transfer (BOT) contracts this year.
He said they want to generate fresh funds from the public offering to veer away from new borrowings. "We’re trying to hold off any borrowing and we have to raise capital to finance the acquisition and upgrading of drilling equipment."
PNOC-EDC is the geothermal and renewable energy development arm of state-owned Philippine National Oil Co. (PNOC). It is one of the most profitable companies of the PNOC group, with a present net book value of between $800 million to $1 billion.
Based on the initial plan, PNOC-EDC will hold the IPO in September this year. But Aquino noted they have to wait for a more favorable market condition before they would push through with the capital-raising scheme. "We are expecting a market slump to last for two months and another two months for the market to consolidate. It will probably be in November or December."
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The Philippine Star
07/05/2006
Petron Corp., the country’s largest oil refiner, has remitted P375-million worth of dividends to the government through the Philippine National Oil Co. (PNOC).
The amount represents a P0.10/share cash dividend to PNOC, which holds around 3.75 billion Petron shares – equivalent to a 40-percent stake in the company.
Petron chairman Nicasio I. Alcantara turned over the cash dividend to PNOC president and CEO Eduardo V. Mañalac.
Since the oil firm’s privatization in 1994, Petron has remitted nearly P6 billion in cash dividends to PNOC.
Alcantara said the company’s ability to consistently deliver dividends to its shareholders is a result of strategic initiatives and investments over the past few years.
These have been reflected in the company’s performance as it continued to sustain its income growth since 2001. In that year, the company posted a net income of P1.2 billion. By 2005, Petron registered a net income of P6 billion — the highest in the company’s history.
The company also remains the leader in the local oil industry with a market share of nearly 40 percent.
More than a year ago, Petron commissioned its $100-million Clean Air Act-compliant facilities, making it the only oil company capable of producing compliant fuels locally without resorting to product importations.
The company has also earmarked $300 million to construct additional refinery units that will allow it to extract high-value petrochemical streams. These investments, which will be commissioned in 2008, are expected to significantly boost Petron’s income.
"We have always aimed to increase shareholder value by pursuing business initiatives that will sustain long-term growth," Alcantara said.
"Beyond our profitability and market leadership, we continue to adhere to good corporate governance practices that are in line with global standards. We believe this is essential to our success," Alcantara said.
For the second straight year, Petron was named one of the best governed publicly-listed companies in the Philippines by the Institute of Corporate Directors (ICD). The ICD is an international organization that advocates good corporate governance.
The company also continues to be a major partner in national development through its Fuel H.O.P.E. (Helping Filipino children and Youth Overcome Poverty through Education) programs.
Petron currently has more than 5,000 scholars under its Tulong Aral program and has built 13 Petron Schools as of end-2005 in areas where venues for learning are sorely lacking.
Petron recently led a business consortium from the energy sector to build the Tulong Kapwa Gawad-Kalinga (GK)-Energy Village to help rebuild the lives of the Leyte landslide victims.
The GK-Energy Village is a community of 100 homes, a multi-purpose hall, a day-care center, and programs on livelihood, health and nutrition, youth development, and values formation.
"The Tulong Kapwa-GK Energy Village is a good example of how collective action from business, government and civil society can work in addressing some of the most urgent problems in the country," Alcantara said.
About 20 percent of Petron shares are held by about 200,000 investors. The Philippine government, through PNOC, and Saudi Aramco each has a 40-percent stake in Petron.
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Philippine Star
July 5, 2006
MANILA (AFP) - The Philippines is determined to push through with the sale of state-run power transmission and generation assets despite the failure of a tender for a 600 Megawatt power plant, a top official said Wednesday.
The government earlier this week cancelled the sale of the Masinloc coal-fired plant after the prospective buyer, YNN Pacific Consortium, failed to make an initial payment on its winning bid of 561.74 million dollars.
"The government's restructuring and privatization program for the power industry will not be hindered because we're moving ahead with the bidding of the assets of National Power (Corp). scheduled for this year," President Gloria Arroyo's chief aide, Eduardo Ermita, said in a statement.
He said the Masinloc case showed that "the necessary measures to ensure that the government interest is fully protected, are in place."
The government must wait for favourable conditions before attempting to sell Masinloc again, he remarked.
The government's power privatization agency has issued invitations to bid for other power assets including three hydroelectric power plants and two geothermal plants with a total of 1,172 megawatts of capacity.
Those seeking to bid for the 25-year concession to run the country's power transmission assets also have until mid-July to submit applications to take part in the public auction.
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The Philippine Star
07/04/2006
The Power Sector Assets and Liabilities Management Corp. (PSALM) has assured that the privatization of other generating assets of the National Power Corp. (Napocor) will continue despite a major setback encountered in the sale of the 600-megawatt (MW) Masinloc power plant.
Masinloc was supposed to be the first big-ticket item sold by PSALM and should have been the government’s benchmark in selling a power plant without a supply contract.
PSALM vice president for asset management and electricity trading Froilan Tampinco said the company is specifically bent on moving ahead with the auction of the Napocor generation assets this year.
PSALM, the agency mandated to privatize the assets of the Napocor, made the assurance to quell unfounded speculations that the government’s privatization program for the electric power industry will be hampered because of the failure of YNN Pacific Consortium to meet the June 30 deadline to deliver the $227.54 million upfront payment. PSALM has called on the $14-million performance bond.
"The government’s restructuring and privatization program for the power industry will not be hindered because we’re moving ahead with the bidding for the assets of Napocor scheduled this year," Tampinco said
The PSALM official added that "It is incumbent upon PSALM to be at the forefront in implementing the necessary reforms in the power sector."
Tampinco’s assurance is a welcome development for bidders of the 100-MW Pantabangan and 12-MW Masiway hydroelectric power plants, the 275-MW Tiwi and 425.73-MW Makban geothermal facilities, and the 360-MW Magat hydropower plant whose sale processes are still ongoing.
He said that investors who have expressed interest in joining the bidding exercises could continue with their due diligence for these plants. The bid date for each plant package will be set by PSALM.
Seven bidders have also signified their intention to bid for the 25-year concession of the National Transmission Corp. (TransCo) slated in September 2006. Of the seven groups who have submitted their expressions of interest to PSALM, five have received their bid documents and are now starting their due diligence for TransCo.
In other development, Ranhill Berhad, the supposed partner of YNN Pacific Consortium in the purchase of Masinloc, disclosed in its local bourse that it would continue to buy out YNN Pacific.
"On behalf of Ranhill’s Board of Directors, we are pleased to announce that Bank Negara Malaysia had on 29 June 2006 approved the remittance of funds by Ranhill to Moretta Finance BV, an indirect wholly-owned subsidiary of Ranhill, pertaining to the consideration for the proposed acquisition," the company said. Ranhill is proposing to buy the entire shares in YNN at $8 million.
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The Philippine Star
07/04/2006
The National Power Corp. (Napocor) sees a need to install additional capacity in the Visayas region soon as the growth rate in the area in the first quarter of 2006 was twice as high as the projected 5.5 percent growth in the country’s gross domestic product (GDP).
Napocor data showed that Visayas registered the highest growth in the energy sales at 11.76 percent from 1,033.26 gigawatthours (GWh) in the first quarter of 2005 to 1,158.05 million gwh in the same period in 2006.
"This is a clear indication that Visayas’ economy is improving, and that the demand for power will continually increase, necessitating the installation of additional power generating facilities," Napocor said.
According to Napocor, the main drivers of Visayas’ power demand are the industrial and commercial activities in the region.
Among the bulk power users in the Visayas are the Visayan Electric Co., Inc., Mactan Electric Co.; Philippine Phosphate Fertilizer Corp., the Central Negros Electric Cooperative, and Iloilo I Electric Cooperative Inc.
The double-digit growth in the Visayas also pushed Napocor’s overall first quarter revenues up to P36.48 billion in January to March 2006, or 25.26 percent more than the P29.13 billion it earned in the same period last year.
The Luzon grid accounted for the big chunk of the power firm’s three-month revenues at P28.17 billion, up 25.89 percent from the year-ago level of P22.38 billion. Visayas and Mindanao contributed P3.83 billion and P4.48 billion, respectively, up from last year’s P3.16 billion and P3.59 billion.
Napocor attributed the higher revenues to a 6.33 percent growth in sales volume, and to the Energy Regulatory Commission’s approval last April 13, 2005 of a power rate adjustment based on the power firm’s return-on-rate-base with time-of-use (RORB-TOU) application. In terms of volume, energy sales rose by 516.22 gwh, or from 8,156.36 in the first quarter of 2005 to 8,672.57 gwh this year. A gigawatthour is equivalent to one million kilowatthours.
According to the report, the higher sales volume can be traced to a 7.04 percent improvement in Napocor’s sales in the Luzon grid, which accounts for close to 70 percent of the power firm’s total market. Specifically, sales in the region went up from 5,491.61 gwh to 5,878.17 gwh year-on-year, due in turn to a 9.24 percent increase in Napocor’s sales to its single-biggest customer, the Manila Electric Co. (Meralco).
Sales to Meralco for the period under review stood at 3,435.75 gwh, up from 3,145.04 gwh in 2005. Apart from Meralco, other Luzon-based utilities like the Batangas II Electric Cooperative Inc., Angeles Electric Corp., and the Camarines Sur II Electric Cooperative, contributed to the higher sales in the grid. Industrial estates like Philippine Economic Zone Authority in Baguio City and the TIPCO Estates Corp. also beefed up over-all sales in the region.
Sales in the Mindanao grid grew by 0.48 percent year-on-year, or from 1,636.34 gwh in January to March 2005, to 1,628.53 gwh this year. The top customers of Napocor in Mindanao during the period were Treasure Steelworks Corp., Global Steel Manufacturing Corp., Philippine Sinter Corp., Iligan Light & Power Co., Inc., and South Cotabato Electric Cooperative II.
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Manila Bulletin
July 4, 2006
HANOI, July 3 (Reuters) — Vietnamese catfish processor and exporter Agifish plans to turn catfish fat into fuel to run diesel engines, a company official said on Monday.
"We are planning to commercialize the fuel based on the result of pilot tests," Agifish Deputy Director Nguyen Dinh Huan told Reuters.
Huan said Agifish has been using the fuel, made from fat left over from processing, to run pumps at its fish ponds in the Mekong Delta province of An Giang in southern Vietnam.
"The fuel is as good as diesel oil," he said.
He said samples of the catfish fuel had been sent for tests at laboratories in Ho Chi Minh City for quality checks and government approval.
The state-run Tien Phong (Vanguard) newspaper on Monday quoted Ho Xuan Thien, the chief engineer of the project, as saying the firm planned to build a 10,000-ton-per-year factory in 2007 to mass produce the fuel for domestic markets.
Thien said a kilogram of catfish fat could produce 1.13 liters of biofuel.
Vietnam produces around 30,000 tons of catfish annually, mainly for exports to the United States and Europe.
Agifish’s products range from canned catfish through pre-cooked breaded fillets to sweet-and-sour fish prepared in clay containers.
Although Vietnam is Southeast Asia’s third largest crude oil producer after Indonesia and Malaysia, it still relies on oil product imports for fuel because it lacks major refineries.
Agifish shares were quoted on Monday at 72,500 dong ($ 4.54) per share on the country’s main stock exchange, the Ho Chi Minh City Securities Trading Center, unchanged from Friday.
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Manila Bulletin
July 4, 2006
The 600-megawatt Masinloc coal-fired power facility, of which sale has been aborted because of the winning bidder’s failure to put up required downpayment is now attracting horde of prospective bidders should the Power Sector Assets and Liabilities Management Corporation (PSALM) set it on auction one more round.
However, the investors have one common concern that shall be considered by privatization implementers -that is for government to re-evaluate the reserve price. This is currently set at $ 388 million.
PSALM moved for the forfeiture of the $ 14-million bond deposit submitted by YNN and new partner Ranhill Power Berhad after the group failed to pay the required downpayment of $ 227.54 million on their June 30 deadline.
Since the government hints of a re-bidding of the asset at "appropriate time"; at least four interested investors have indicated fresh interest to join the auction. Two of these are American companies and the rest are Asian energy firms.
"The plant can be re-bid at the appropriate time if conditions warrant," PSALM has noted; but no specific timeframe was given on when they shall decide on this.
A source from one of the American firm stressed that "the reserve price shall be made more reasonable so it becomes attractive to buyers, otherwise if they prefer a higher price for the sale, the consumers will be burdened with expensive electricity rates and we don’t want blamed for that."
The new flock of interested buyers of the Masinloc asset are saying that the $ 561.74 million purchase price tendered by YNN Pacific Holdings may not be matched anymore when PSALM rebids the plant.
PSALM explained that the valuation on the Masinloc plant had been based on long-run avoidable cost; or the funding an investor would need to sink in as referenced on a "best entrant facility."
To date, Masinloc is considered one of National Power Corporation’s (NPC) "crown jewel" that generates earnings for its coffers and also provides one of the cheapest electricity rates to consumers.
Masinloc was deemed to have high availability and reliability as measured by its relatively low forced outage rate of 1.20 percent and 2.20 percent, chiefly in 2001 and 2002.
For lack of transmission constraints, it is likewise expected that the plant would be dispatched at its full load to the Luzon grid.
Given the need for new capacity, Masinloc also has good potential for expansion of another 300 megawatts; giving future owners "economy scale" in terms of use of common facilities and less hassle on the typically tedious process of securing sites for coal-fired power plants.
The plant currently has two units with 300-MW of installed capacity each and its useful life can be as long as 50 years.
As can be seen from the power development blueprint’s supply-demand data, even Luzon grid is now suffering from thinning reserves and this signals the need for new investments in power plants, otherwise, the country will be plunged into a new round of crisis.
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Manila Bulletin
July 4, 2006
The level of revenues generated by state-owned National Power Corporation from delivered electricity to customers jumped by a significant 25.26 percent due to higher selling rates and increase in demand.
Data from its sales and services group indicated that its energy sales yielded P36.48 billion from January to March as compared to P29.13 billion in the same period last year.
The Luzon grid cornered the biggest chunk of the sales with revenues hitting P28.17 billion, higher by 25.89 percent from the previous year’s P22.38 billion.
Visayas and Mindanao similarly contributed to the revenue jump with P3.83 billion and P4.48 billion, respectively; as against their posted earnings of P3.16 billion and P3.59 billion last year.
"The higher revenues are atttributed to the 6.33 percent growth in NPC’ sales volume," the power firm said; adding that the other factor rested on the Energy Regulatory Commission’s approval of its bid for a higher rate on return base (RORB) which effectively pulled up its generation charges starting last year.
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